I heard from my banker that mutual funds charge a fund management charge which is around 2-2.5 per cent. I am buying mutual funds online and wish to know if the FMC will be lower because I am not buying through an intermediary? -Ashu Bareja
The fund manager who along with his team of analysts are employees of asset management companies; the AMC charges a fee for lending the expertise of the fund management team which forms the fund management charges. Since August 2009, when SEBI abolished entry load for mutual funds investors have to bear only the fund management charges which is less than 1.00 per cent for debt funds and 1.5 to 2.5 per cent for equity funds. Whether you are investing online or through a bank or brokerage or even directly with the AMC, the fund management fee is deduced and is reflected in the expense ratio of the fund that you invest in.